I cover the video game industry, write about gamers, and review video games.
You can follow me on Twitter and hit me up there if you have any questions or comments you'd like to chat about.
Disclosure: Many of the video games I review were provided as free review copies. This does not influence my coverage or reviews of these games.
I do not own stock in any of the companies I cover. I do not back any Kickstarter projects related to video games. I do not fund anyone in the industry on Patreon.

Microsoft Deserves Credit For Xbox One Policy Changes

After a disastrous Xbox One launch, MicrosoftMicrosoft has worked hard to recover from the PR nightmare.

Microsoft (NASDAQ:MSFT) screwed up its Xbox One launch magnificently, and for several weeks the PR disaster played out in all its gory detail, culminating finally at E3, where SonySony (NYSE:SNE) rode the waves of consumer discontent to a resounding public relations victory.

The Xbox One has been lambasted for its new policies, including an online requirement and more restrictive sharing and used-games policies. These policies laid the groundwork for a shift toward a digital future and the slow death of both brick-and-mortar retail and second-hand sales.

Of course, it turned out that the policies were just a tiny bit ahead of their time, and forcing all the cons of a new digital system, without any of the supposed benefits, justifiably angered consumers, nudging them gently into the arms of the competition.

Now the next-generation Xbox video game console faces a steep uphill battle, thanks both to the bad PR it’s received and to the $499 price-tag—$100 more than Sony’s PlayStation 4.

To their credit, Microsoft listened to consumer backlash, and criticism from the media and analysts, and a few days later the company reversed those policies, making offline a viable option for the Xbox One, and removing the digital sharing in favor of traditional disc-sharing and a standard used games policy.

They even explained that the family sharing plan they had envisioned might come back if they could find a way to make it work, and admitted that they botched communicating their vision for the Xbox One to consumers.

“One of the things I think we learned was that we didn’t talk enough,” Xbox One chief product officer Marc Whitten told IGN, “and we were incomplete in a lot of how using the system would work. Because we weren’t participating in the conversation in a deep enough way, it got us sort of off cycle about how we talk about our program. I think we’ve learned a lot of lessons. And I think it’s something that you’re going to see a lot more from us, frankly, is engaging more with the community. I think it’s the number one thing I’d want to do if I went back, was have the conversation more open and more complete.”

Of course, as with all messaging problems, the Xbox One fiasco goes deeper than a failure of communication. Microsoft failed to understand what many of its core customers expected, and went ahead with their plans full steam until it was (almost) too late.

But unlike certain other messaging screw-ups in the video game industry, Microsoft has quickly—in corporate terms—shifted course and gone about trying to repair the damage. This isn’t an easy task at this point, but there’s no question in my mind that they’ve made the right decision both in the policy reversal and in their messaging shift.

And so the PR battle continues. The damage has been done.

Paul Tassi reported earlier on the crowd at EVO 2013 booing the Killer Instinct announcers when they mentioned the game was an Xbox One exclusive.

Paul points out that the “outrage won’t last forever, and once both systems are out and people realize that the Xbox One isn’t evil incarnate, it should start to sell well if it lands a price drop and some great exclusive titles.” But a price change may or may not come, and “great exclusive titles” need to be truly compelling to move a brand-new system..

“If the Xbox sells close to the same number of units as the PlayStation 4, then I don’t think you get a price cut,” video game industry analyst Michael Pachter said in his most recent Pach-Attack video. “If it lags behind the PS4 by a lot, then I think you get the price cut in a hurry.”

Pachter notes that Microsoft is banking on understanding its consumers better than consumers themselves.

“Microsoft’s convinced that the camera and the microphone array are worth the extra hundred bucks, and they think they know better than you,” he said. “They’re going to wait and see if you think it’s worth it, too.”

It’s a gamble for Microsoft, but a better gamble than the original DRM policies Microsoft attempted.

I’m simply pleased to see both the value of market competition play out before our eyes and the value of consumer activism, social media, and a critical press at work. Competition alone may not have changed these policies, but competition fueled by widespread consumer outrage certainly did.

Microsoft has chosen to roll with the punches, adapting to feedback, and I can only give them credit for that. Especially these days when too many game companies appear oblivious or even apathetic to the feedback of their customers.

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.

I don’t know if I’d say they deserve credit for them. I guess you could say they deserve credit for not destroying their company. Prior to these changes PS4 was out pre-ordering the XB1 by 3-1 and in some stores I talked to 4-1. Microsoft had to do something or else they were going to get annihilated next gen. That’s like saying that FDR deserved credit for deciding to get into WW2. They really didn’t have an option if they wanted to survive.

Hey Anon, we get it. You’re an Xbox Fanboy. No matter what happened or what anyone says, you’re gonna say “None of that is true” The fact of the matter is, you know it’s true and that’s what’s eating away at you. That’s why your idiocy is showing badly. LoL. People like you are a riot. I get joy out of seeing how dumb fanboys get when their product is clearly screwing them hard.

Actually Anon it is true. Now I didn’t do massive market research but I’ve talked to 6 different gamestop managers in my area and they all said the same thing. Prior to the changes MS was being destroyed by PS4. I’m glad they made the changes though. As an economist I’m happy because I like the competition. I’m getting a PS4 but I want the XB1 to do well, better competition means better games.

I didn’t do massive market research per say, but I can collaborate with your findings at least so far as International Amazon pre-orders go. Prior to the reversal, the PS4 had a massive lead in a traditionally Xbox-supporting market- as evidenced by the fact that its higher number of launch consoles sold out weeks before Xbox One’s Day One editions- and in the U.K.’s Best Seller of 2013 list, the Xbox One was a staggering sixty-seven slots behind the PS4; it didn’t even make the top 100 list in France, while the PS4 was in the 40s. Similar, if less extreme, examples could be found in Germany.

Now, what should be noted is that though the reversal IMPROVED their position, they’ve still lost a lot of ground. The PS4 continues to out-perform in U.S. Amazon overall 2013 pre-orders, as much of the X1′s momentum has been cut now that Day One consoles have finally sold out. The X1 is still a few dozen slots behind the PS4 in the U.K. market, with hourly sales indicating it will not close the sales number gap any time soon. Considering much of the 360′s advantage in the current generation’s sales came from winning big in those two markets, even reaching mere parity in the U.S. would not give the X1 any advantage… and probably would not save them from a disadvantage.

Just that sentence alone is why they don’t deserve any credit. Ever since they started this venture Microsoft has done nothing but blatantly ignore their consumers and I guess from their stand point the only thing to do was just go with it. That would ultimately become the downfall of the console because then Microsoft ended up milking the system to the fullest extent. Gold requirements, Ads on the dashboard, forcing the metro look to the dashboard, yadda yadda.

Microsoft was losing me since my gold was running out (may), then pretty much lost me in the coming weeks.

anon, i have seen your other comments and just want to say, this site, and others like it, are for true, intellectual discussion. Please refrain from posting if all your going to do is berate and stifle others opinion. Everyone is entitled their own opinion, and if you cant debate intellectually, calmly, and kindly, then you have no place here.

Now, my opinion on this issue.

The kinect is a gimmick, something being forced upon the customer base. I have never considered purchasing a 360 kinect, as i could care less about its functions. Along with current US privacy concerns, it truly dissuades me from purchasing a Xbox One.

However, having a Family Share Plan for Digital merchandise is a wonderful idea, and if re-implemented, correctly, without to strict policies, then it may change my tune, if only slightly.

But….This all pales to the bad PR, and the outright Anti-consumer policies and attitude of Microsoft this past year. I am more likely to purchase a product from a company i trust, than from one i do not, and microsoft is no longer on the list of companies i trust.

Ditch the stupid Kinect and drop the price $100, and I MIGHT consider it. Until then, they won’t be able to GIVE me one. They screwed up too bad by telling gamers the way it was going to be, whether they liked it or not. The damage is done- the 360 was my last XBox.

“One of the things I think we learned was that we didn’t talk enough,” I think they talked too much in terms of talking to their consumers like they were idiots and telling people to piss off. Some consumers don’t like to be talked down to and I don’t think they’ll be able to fix anything with them no matter how much damage control they do. They will however win back the Xbox loyalists and it showed after the reversal.

Add the line you quoted along with NOT LISTENING!!! What we knew to be rumors (prior to announcement) MS knew to be true. With all the backlash being spewed prior to the official announcement–and we’re talking a long time between hearing the rumors and their official announcement–you think they would have come out playing the hero and announcing that they were just rumors and just not true.

Wow. The author of the article is trying to defend and uplift what Microsoft has done? Truly pathetic. The branch who makes and decides what happens to the Xbox One has dug a grave in which they will have to fight to climb out of. They decided to please the corporations and screw the gamer over and now when people complained about it and got it changed you want us the gaming community to give them credit for changing something that should not have happened. Do us a favor and take whatever bribe money Microsoft gave you and shut up. Wanted to rob us and now you want to make us forgive them. Pathetic.

dude what are you talking about? microsoft is awesome not only do I now have the best system ever, but I also have the policy that I always wanted- I have my cake and I get to eat it too. Stop being so hard on yourself.

Interesting… you claim “the thing is, as the consumer sees it, credit is not due”. I am a consumer and I can assure you that as I see it (as a consumer) credit is due. They changed the policies after I complained about their stupid DRM policies. Now they offer the system that I wanted without the DRM. That deserves credit for listening to your customers.

So please stop saying that you know what my opinion is as you stated in your comment. You obviously do not know my opinion and have no right to state that you do.

The author is not defending MS, just giving kudos to MS’s new direction of the XB1. But I think that MS is still in better position than most people think, its easy to bash just like most people are doing on here. I understand what MS was trying to do and I applaud them for the their attempts but they just needed to clarify things a lot better.

As far as the gaming community I feel as its become very close minded and does not want change like it once did, MS did not even release this product yet, 95% of you people did not even use or experience it yet so why such hate!? Cause you don’t like the vague details that MS gave you!? I admit the everything looked sketchy but I was waiting on more information on how this was going to EXACTLY work before I got my panties in a bunch, because that’s what I would think mature people. (sorry for the rant)…

No, no they don’t. The people deserve credit for it. Not Microsoft. Not reviewers. Not critics. The people, as a whole. It was the people who raged against it and the ex-microsoft fans who stood up against a company trying to take away their ownership of games that caused them to change.

Microsoft simply did what any intelligent company would do. They saw their systems were lagging behind in sales, and changed it. Afterwards they try to spin stories about how ‘oh we didn’t ACTUALLY try to implement these horrible ideas’ or ‘But it would have been SOOOO great you guys, you’re all idiots for not seeing that!’. It’s typical company things, I don’t begrudge them for doing it, but I won’t give them credit where it isn’t due.

“Microsoft has chosen to roll with the punches, adapting to feedback, and I can only give them credit for that. Especially these days when too many game companies appear oblivious or even apathetic to the feedback of their customers.”

The only gaming company that was apathetic to the consumer and basically told the gaming community to “F off” was Microsoft.